Indian met coke prices remain steady this week, import activity on the rise

Few merchant cokeries have reduced production levels

Indian end users securing Chinese and Indonesian coke

Indian met coke prices have been recorded at INR 34,000/tonne (t) ex-Jajpur this week. Prices dropped by INR 500/t m-o-m compared to INR 34,500/t ex- Jajpur in January 2024.

Prices remained unchanged w-o-w amid subdued trading activities in the market. Some merchant coke oven plants are operating below full capacity and, in response to reduced imported offers, are choosing to blend imported met coke. Also, current levels of coking coal continue to remain higher for cokeries henceforth they have reduced purchase of coking coal. There is low demand of coking coal and pulverized coal injection grades in the market.

Coking coal offers

Australian premium hard coking coal prices remained largely stable w-o-w, assessed at $314/t on 22 February 2024 due to reselling interest. Several unsold cargoes for February and March 2024 have been seen in the market. Market participants noted unsold prime coal cargoes, signaling subdued demand. The PHCC prices have edged lower in last few sessions but with limited number of new bookings. Demand for alternative source of origin in coking coal was observed during the week. A major deal was heard to have been concluded by Indian end-user for coking coal for 30,000 t GYC at $314/t FOB early this week.

Imported coke prices

The end of Lunar new year holidays could not fetch much demand of met coke in the Chinese market with lower price levels in domestic market as well as for March to April loading coke exports.

Chinese met coke prices are assessed at $355/t CNF India, for 65% CSR, CFR India. Chinese mills in Hebei and Tianjin have accepted another round of metallurgical coke price cut by RMB 100-110/t amid weak buying interest. End-users favored Indonesian coke, exerting downward pressure on prices. Met coke prices in Hebei's Tangshan were assessed at RMB 2,160/t ($300/t), a fall of RMB 100/t ($14/t) w-o-w.

Few coke makers revealed that they have seen the market heading towards $300/t levels due to falling coke prices following conclusion of price cut. Also, traders were aggressively seen selling of their inventories in threat of additional round of price cut.

Indian end users are trying to secure Indonesian and Chinese coke at discounted levels. However, Chinese material needs to be priced much lower to secure deals.

Shanxi, China's major coal-producing region, mandates miners to limit coal overproduction, initiating safety checks from March 2024 to May 2024. This directive aims to mitigate accidents stemming from excessive output. The move is expected to curtail supply by 5-6 mnt. The province produces 29% of China's coal supply. However, it is not expected to impact the coke market significantly, given its plans to curb production of lower ranked coals as some of its mines overproduced last year.

Pig iron market

Indian pig iron prices remained unchanged w-o-w and were assessed at INR 38,500/t DAP Durgapur on 22 February 2024. Moreover, prices rose by INR 100/t w-o-w in the Raipur market and are currently assessed at INR 36,800/t DAP- Raipur.

Outlook

Domestic met coke prices are expected to see a downturn, influenced by lower prices of imported material and change in coking coal prices. The decline in imported coal prices is attracting end-users toward imports, creating a scenario where domestic coal prices are expected to decrease in the near term.